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HQ 958644




August 29, 1996

CLA-2 RR:TC:TE 958644 GGD

CATEGORY: CLASSIFICATION

TARIFF NO.: 4202.22.1500; 4202.32.1000

Port Director
U.S. Customs Service
Second and Chestnut Streets, Room 102
Philadelphia, Pennsylvania 19106-2999

RE: Decision on Application for Further Review of Protest No. 1101-95-100534, filed August 2, 1995, concerning the classification of wallets or small handbags

Dear Sir:

This is a decision on a protest timely filed on August 2, 1995, against your decision in the classification and liquidation of wallets or small handbags, entered in January 1995.

FACTS:

You classified the merchandise under subheading 4202.22.1500, HTSUSA, the provision for "Handbags, whether or not with shoulder strap, including those without handle: With outer surface of sheeting of plastic or of textile materials: With outer surface of sheeting of plastic," with an applicable duty rate (in 1995) of 19.6 (now 19.2) percent ad valorem.

The protestant claims that the goods should be classified in subheading 4202.32.1000, HTSUSA, the provision for "Articles of a kind normally carried in the pocket or in the handbag: With outer surface of sheeting of plastic or of textile materials: With outer surface of sheeting of plastic: Of reinforced or laminated plastics," with an applicable duty rate of 12.1 cents per kilogram plus 4.6 percent ad valorem. -2-

The subject goods are identified on invoice documents by two style numbers - 038-944335 and 038-951780 - each described as a "vinyl wallet non-stuffed." Sketches submitted with the protest indicate the dimensions and features of each of the items.

Sketches of style no. 038-944335 indicate that the article measures approximately 8-1/2 inches in height in the closed position (perhaps 16 inches when open, excluding flap) by 5-1/2 inches in width by 2 inches in depth (although the invoice indicates a depth of only 1 inch). There is a detachable carrying strap measuring approximately 25 inches in length. The item features at least 2 billfold sections for paper currency, several slots for credit cards, a pen holder, and 2 windows for identification cards, or for one card and a mirror. An eye glass case forms the rear exterior of the folded article.

Sketches of style no. 038-951780 indicate that the item measures approximately 7-1/2 inches in length by 4 inches in width (with flap closed). The invoice indicates that the unexpanded article measures approximately 1/2 inch in depth. There is a detachable carrying strap measuring approximately 25 inches in length. The item features approximately 5 flat utility sections (one of which is zippered) and 2 large gusseted pockets, all of which extend the length of the article. The inside of the main closure flap contains a window for an identification card. An eye glass case forms the rear exterior of the article.

ISSUE:

Whether the goods are properly classified in subheading 4202.32, HTSUS, as articles of a kind normally carried in the pocket or in the handbag; or in subheading 4202.22, HTSUS, as handbags.

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI may then -3-
be applied. The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and GRI.

Among other goods, heading 4202, HTSUS, provides for traveling bags, handbags, wallets, and similar containers. Since the merchandise is similar to a wallet and/or a handbag, it is covered by the heading.

Subheading 4202.22, as well as subheadings 4202.21 and 4202.29, HTSUS, cover handbags, whether or not with shoulder strap, including those without handle.

Subheading 4202.32, as well as subheadings 4202.31 and 4202.39, HTSUS, cover articles of a kind normally carried in the pocket or handbag. The subheading EN to these three subheadings states that:

[t]hese subheadings cover articles of a kind normally carried in the pocket or in the handbag and include spectacle cases, note-cases (bill-folds), wallets, purses, key-cases, cigarette-cases, cigar-cases, pipe-cases and tobacco-pouches.

On June 21, 1995, this office published a General Notice in the Customs Bulletin, Volume 29, Number 25, concerning goods identified as "Wallets on a String." The attributes of both handbags and articles of a kind normally carried in the pocket or in the handbag were discussed. With regard to Articles of a Kind Normally Carried in the Pocket or in the Handbag, the notice stated in pertinent part that:

Such articles include wallets, which may be described as flat cases or containers fitted to hold credit/ identification cards, paper currency, coins and in some instances a checkbook holder. Articles meeting this description which also possess a detachable carrying strap have been classified as flatgoods.

In order to be classifiable as a flatgood, the article must fit comfortably in a handbag or pocket. For example, rectangular or square cases measuring approximately 7-1/2 inches by 4-1/2 inches, or 4-3/4 inches by 4-1/2 inches, in their closed position, have been classified as flatgoods. -4-

Combining the characteristics of two flatgoods does not transform a flatgood into a handbag. Thus, the addition of a spectacle case holder to what is otherwise nothing more than a flat case with a carrying strap has been classified as a flatgood.

With respect to Handbags, the notice stated that:

A handbag functions as a carry-all container for various small personal effects:

A container which is not fitted to hold articles such as credit/identification cards, paper currency, coins or a checkbook holder is classifiable as a handbag. Therefore, a clutch bag or an evening bag measuring, for example, 7-1/2 inches by 4-1/2 inches, shall be classified as a handbag.

The determinative feature of a handbag is its ability to hold several objects not associated with a wallet. A bag which may accommodate articles such as a hairbrush, cosmetics, keys and other loose personal effects shall be classified as a handbag, even if it also incorporates the features of a flat case fitted to hold the items set forth above.

The presence of gusseted and/or zippered compartments will be taken into consideration in a determination of whether a case has generic carrying capacity. The presence of a wrap-around zipper may be an indication that the container is a carry-all if the zipper creates an inner space suitable for carrying three-dimensional objects.

Turning our attention to the protested merchandise, we note that both styles of articles are fitted to hold items such as credit/identification cards, paper currency, etc. Both articles also are at least capable of being carried in a handbag. We find that if style no. 038-944335 were filled with the essentially two dimensional objects it is designed to carry, it would be likely to fit comfortably in a pocket of handbag. On the other hand, style no. 038-951780 is designed to additionally hold three dimensional items not associated with flatgood capabilities. Its gusseted pockets are expandable and provide a generic carrying capacity for loose personal effects such as a hairbrush, keys, cosmetics, etc. We therefore conclude that style no. 038-951780 -5-
is classifiable as a handbag, and that style no. 038-944335 is classifiable as an article of a kind normally carried in the pocket or in the handbag.

HOLDING:

The handbag identified by style no. 038-951780 is classified in subheading 4202.22.1500, HTSUSA, the provision for "Handbags, whether or not with shoulder strap, including those without handle: With outer surface of sheeting of plastic or of textile materials: With outer surface of sheeting of plastic." The applicable duty rate (in 1995) is 19.6 percent ad valorem.

The flatgood identified by style no. 038-944335 is classified in subheading 4202.32.1000, HTSUSA, the provision for "Articles of a kind normally carried in the pocket or in the handbag: With outer surface of sheeting of plastic or of textile materials: With outer surface of sheeting of plastic: Of reinforced or laminated plastics." The applicable duty rate is 12.1 cents per kilogram plus 4.6 percent ad valorem.

Except to the extent that reclassification of the merchandise as indicated above results in a net duty reduction and partial allowance, you are instructed to deny the protest. A copy of this decision should be attached to the Form 19 to be returned to the protestant.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision, the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS, and to the public via the Diskette Subscription Service, the Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director

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